Potential console killer OnLive to go live June 17

Update 10:35 a.m. PST: This story has new details regarding where the OnLive service will be available and why it was delayed.

SAN FRANCISCO--OnLive, a streaming video game service that, if properly implemented, could threaten traditional console makers like Microsoft, Sony, and Nintendo, announced Wednesday that it will launch on June 17.

In a speech at the Game Developers Conference here, OnLive CEO Steve Perlman said that the service will go live in the 48 contiguous United States during the E3 video game conference in Los Angeles, and, at an initial price of $14.95 a month, will offer consumers the ability to rent or purchase AAA games from the likes of Electronic Arts, Ubisoft, 2K Games, THQ, and Warner Bros. Interactive Entertainment.

For OnLive to officially announce its launch date at GDC is appropriate, given that the service was first unveiled at the conference a year ago. At the time, gamers wanting to play full-scale console games were excited by the service's potential for obviating consoles like the Xbox, PlayStation 3, and Wii. According to OnLive, the service will work on most PCs or Macs via a browser plug-in, or on high-definition TVs via what the company is calling a MicroConsole adapter.

At GDC last year, OnLive said it expected its service to open to the public the coming winter. On stage Wednesday, Perlman admitted that the company is late, but said that since it's still winter right now, they will only be about three months late, and that the delays were partly based on wanting to make the service better than had been planned last year.

Upon its unveiling, OnLive promised that gamers would be able to get high frame rate, no-lag performance out of most console games, regardless of how powerful their computer is, and as long as they have minimum Internet connection speeds of 1.5 Mbps for standard-definition play, and 5 Mbps for HD.

"The really hard problem," said Perlman on Wednesday, "is how to get this to work reliably over consumer connections. [There are] packet drops, packets reordered, and other people using the connection." So, he said, OnLive builds error correction and error concealment into the data compression. "We don't have time to ask for a new packet, if the packet is lost or corrupted...We have to deal with what's coming in right then."

Last year, the company explained that it was able to deliver high-performance streaming of games due to a series of patented and patent-pending compression technologies. Rather than having consumers download the games, OnLive will host them all and stream them from a series of the highest-end servers.

OnLive argues that, among other things, this infrastructure model future-proofs customers because they will never have to upgrade their equipment. Rather, all the technology advances will happen on the back end.

However, many critics have questioned whether such a system can work under real-life conditions. Some have said that if users are too far away from OnLive's servers that there would be no possible way that the performance would be as good as advertised.

But on Wednesday, Perlman said that the service is intended to work as long as the customer is no more than 1,000 miles from a data center. And with data centers in the San Francisco Bay Area, Chicago, Washington, D.C., Atlanta, and Dallas, it hopes to obviate that problem. Still, getting an optimal connection isn't automatic on the Internet, he said. So the company has developed technology that finds the optimal route when someone connects.

Additionally, OnLive will likely have to have a significant budget for infrastructure upgrades every six months if it hopes to keep its servers up to the task of streaming the increasingly more powerful games coming out of the major game companies.

Of course, the question of whether users' proximity to the OnLive servers affects their quality of play is the most important question OnLive has to answer. If performance degrades as users get farther away from the company's servers, its potential user base will be much smaller than what is needed to seriously challenge the console makers, or any of the other companies, such as InstantAction, that seek to deliver console-quality games over the Internet.

If it does work, however, users may flock to the service in droves, particularly because they would be able to play their favorite games anywhere they can access a computer with the OnLive plug-in and a high-speed connection.

And, Perlman said, the service allows users to run their games on many kinds of devices. To demonstrate, he showed that it was possible to play games over OnLive on an iPhone.

First slate of games
With its Wednesday announcement, OnLive was a bit cagey as to which games will be available to players at launch. It said that it will officially announce the list of launch titles before E3, but also said that "anticipated" games include Borderlands, Dragon Age Origins, Mass Effect 2, Assassin's Creed II, Prince of Persia: The Forgotten Sands, and Metro 2033.

The company also said that for their $14.95 a month fee, users will get a constantly expanding library of games. In addition, the first 25,000 "qualified" people to sign up for the service will have the fee waived for the first three months. It said interested gamers should go to its Web site for details on who qualifies for that offer.

The company said last year that it will likely offer free trials of some portion of games in a bid to let users make informed decisions about what they want to purchase. OnLive knows that some players will likely use that offering as an opportunity to test games and then buy them for their consoles, but as long as people come to OnLive, the company will probably be happy.

And given that social play is one of the most important elements of any gaming service, be it Xbox Live, Facebook, or an iPhone, OnLive promises that users will have access to a wide range of social features including spectating, a social feature in which users can digitally watch others play games in real time. As well, following the Xbox Live model, OnLive will offer what are known as "brag clips," which are 15-second replays of game action that players can share with friends to demonstrate their skills. That's possible, the company said, because the OnLive service is continually recording the last 15 seconds of action.

Now the question is whether OnLive can deliver on its promise. If it can, the Microsofts, Sonys, and Nintendos of the world will have something very serious to worry about. If not, it will be just another technology that offered to change the game but didn't execute.